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Shares in Portuguese wind power company EDP Renovaveis have fallen 2.4% in early trading after the company was forced to price its initial public offering low to guarantee investor demand in a sign that investor appetite for the renewable energy sector may be exaggerated.

The €1.57bn (€2.4bn) initial public offering has been the largest in Europe so far this year as volatile equity market conditions have deterred many issuers.

The planned €2.5bn flotation of Spanish road-toll company Itinere by its parent Sacyr Vallehermoso was postponed at the end of April due to weak demand from institutional investors.

Portuguese utility EDP decided to press on with the listing of its wind unit despite general market conditions as well as disappointing after-market performance of Spanish wind power company Iberdrola Renovables since its €4.5bn flotation last December.

Shares in the Spanish company have been trading more than 30% below their offer price of €7 since the start of this year. EDP had hoped that the market would respond well to the offering of its wind unit if it was priced at a discount to the valuation of Iberdrola Renovables but the early signs were disappointing.

Angus McCrone, chief editor at clean energy information provider New Energy Finance, said that investors may be becoming less willing to pay a premium for renewable companies that are “utility plays” compared with those that make components for the renewables sector given that these parts are in short supply.